Monday, March 2, 2009

Airlines Loosing Less Bags

Airlines lost 1.3 million fewer bags in 2008, as more passengers wheeled, dragged and toted their luggage aboard planes to avoid paying new fees to check bags, federal data show.

Passenger reports of lost or destroyed luggage on domestic flights operated by the 20 largest U.S. airlines plunged by one-third last year versus 2007, according to the Bureau of Transportation Statistics, with improvements most noticeable during the fall, when fees for the first checked bag became commonplace.

The drastic improvement in baggage handling is one quirky result of a new push by U.S. carriers to charge a la carte for services such as seat upgrades and fresh pillows that used to be included in the price of a ticket.

While airlines make millions of dollars from new charges for checked bags, said aviation consultant Robert Mann, they also save money and boost results by outsourcing to travelers one of the most glitch-prone airport operations: transporting bags to flights and among carriers.

"The fewer bags you check, the fewer bags you lose," Mann said.

What's unclear is whether carriers will be able to continue with this strategy as demand for travel slows amid economic turmoil. US Airways last week said it would drop charges for in-flight sodas and coffee on March 1 rather than risk passenger backlash after other carriers refused to follow its lead.

However, Donnellon hasn't stopped flying United and American Airlines, even though he thinks their new baggage fees are "egregious." He no longer checks bags when he flies those carriers.

The greatest beneficiary has been American Airlines, the first major carrier to announce it would charge for a checked bag. The Ft. Worth-based carrier lost about 150,000 fewer bags in 2008, a 26 percent improvement over its 2007 results, federal data show.

American also garnered more revenue from baggage fees than any other U.S. carrier. During the third quarter, when the charges widely took effect, American collected $94.1 million, nearly three times what it took in a year earlier. Southwest, which doesn't charge for the first two checked bags, generated $6.8 million in baggage fees in the same quarter, the latest for which data is available.

American got a better handle on its baggage, said spokesman Tim Smith, in part because it carried fewer passengers as it trimmed domestic capacity and it increased the ground time between flights, which gives it more time to handle bags.

But American also is handling less luggage. The average number of checked bags slipped to less than one per passenger from 1.2 per passenger before the fees were introduced, Smith said.

About half of American's domestic passengers check bags, down slightly from the pre-fee era, and about a quarter of its passengers pay luggage fees, while the rest are exempt from the charges.

"If there is a big change, it's that we are seeing fewer second checked bags," Smith said. "What it simply means is people are saying, 'I can make do with one checked bag, or I can consolidate and take less.' "

For a great article on airline credit card's check out Nomadic Matt's article

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